Forex Forecast & Forex Technical Outlook for 20 March 2023 to 24 March 2023

The US financial sector remains weak, prompting market speculation that the Fed may not hike rates at its upcoming meeting. Besides the Fed's attempts to reduce financial stress, inflation remains a concern. Thus, a rate increase with high projections is inevitable. Overall, the US dollar is likely to benefit from the decision. 

The Bank of England and the Swiss National Bank will also meet, and more indications about the Eurozone economy may come from these meetings.

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Forex Technical Outlook for 20 March 2023 to 24 March 2023

On Wednesday, Fed officials must choose between battling inflation and preserving the US financial system. Traders expect the Fed to stop tightening soon due to banking sector issues. As per the current projection, the Fed will raise rates by a quarter-point 80% of the time. Market pricing predicts summer rate reduction.

As well-capitalized US banks, predictions of a Lehman-style disaster are overdone. Smaller regional banks, which the Fed supports with an emergency lending program, are the main stressors. Services inflation, excluding shelter, hit 6.9% last month. Policymakers must tighten due to solid employment indications.

Last week, the Fed Chairman warned that rates could increase over December's 5.1% forecast. If maintained or lifted next week, market pricing predicts rates at 4.2% by year-end, a substantial gap that would certainly startle markets.

Let’s see important releases for this week:

• Canadian CPI on Tuesday
• The UK CPI on Wednesday
• FOMC Statement and Federal Funds Rate on Wednesday
• SNB Monetary Policy Assessment on Thursday
• The UK Official Bank Rate on Thursday
• French & German PMI’s on Friday

Now move to the weekly price forecast:

EUR/USD

The EUR/USD price passed a volatile week due to several uncertainties from US and Eurozone banks. As a result, a sharp decline and an immediate recovery have appeared, eliminating all gains to bears.

There are two consecutive weekly candles seen as Doji formation, which is a sign that the indecision has been running for more than 10 trading days. In that case, the primary outlook of EUR/USD is to look for a valid breakout with solid pressure before forming a stable trend. 

In the daily chart, the price e is trading sideways, whereas the long-term outlook is bullish. The first bullish sign is that the current price is trading above the February close of 1.0557. The dynamic 100 SMA and static 1.0515 supports push the price up, which can resume the broader buying pressure anytime.

In the indicator window, the current MACD Histogram is above the neutral line. The recent buying pressure from MACD lines also supports buyers, which can extend the pressure after moving above the neutral line.

Based on the current weekly outlook of EUR/USD, a valid breakout from the 1.0759 level is needed before forming a solid buying pressure towards the 1.1000 level.

The alternative trading approach is to look for exhaustion from the 1.0759 to 1.0675 area with a daily candle below the 20 DMA level. In that case, the downside pressure may extend toward the 1.0400 area. 

GBP/USD

The perfect channel breakout, a proper correction, and a bullish rejection from the dynamic 20 DMA initiated the bull run in the GBP/USD pair. Based on last week’ GBPUSD outlook, the upside possibility is still valid, where the ultimate target is to test the 1.2443 level.

In the daily chart, the current price is trading above the 20 DMA support, while the 100-day SMA is working as a backup to bulls. 

The long-term bullish trend is also visible from the candlestick chart, as the price has risen since the Covid-19 market crash. Therefore, the current buying pressure from the channel breakout has long-term investors' support for the coming days.

In the MACD window, the current Histogram is above the neutral line, and EMA’s are pushing higher with a bullish crossover.

Based on this outlook, investors might find the week as a bullish trading opportunity for the GBPUSD price. The primary outlook is to look for long opportunities, targeting the 1.2448 resistance level.

However, a break below the 20 DMA support could initiate a consolidation before forming a stable trend.

AUD/USD

AUD/USD bulls were active the previous week, which showed a recovery within the long-term bearish trend. This week, investors should keep a close eye on the near-term level to find whether it continues the trend.

This technical analysis shows the weekly bullish recovery, which closes as an inside bar within the previous week’s strong bearish formation.

The daily chart shows the near-term supply zone at the 0.6773 to 0.6727 area, which will work as a critical point-of-interest level for bears. 

The dynamic 20-day Exponential Moving Average is an immediate resistance in this instrument, while the 100 MA resistance is above the 20 EMA with downward momentum.

The early buying sign is visible from the Indicator window, where MACD EMA’s have shown a bullish crossover with a long space to move higher.

Based on the daily outlook of AUD/USD, the bearish possibility is valid as long as the price remains below the 0.6773 resistance level. In that case, any bearish intraday opportunity could be short, targeting the 0.6590 level.

The alternative approach is to look for long opportunities if bulls manage to recover the 0.6773 level with a daily candle close.

USD/JPY

USD/JPY failed to make a new swing high, eliminating the bullish trend continuation opportunity. Last week, bears were back in the market and pushed the price down towards the safe haven Yen by forming a solid drop-base-drop formation.

This technical analysis shows how the daily price is aiming lower by forming a base at the 135.09 to 133.69 area. Therefore, the primary trading approach is to look for short opportunities if the price trades below this point of interest.

The weekly candlestick formed a strong bearish close in the long-term outlook, while the dynamic 100-day SMA is above the price. The 20 DMA is above the 100 SMA and pushing higher. This indicates that long-term traders are still bearish in this instrument, while medium-term traders match the higher timeframe’s direction.

The indicator window also shows a strong bearish opportunity, where the MACD Histogram is making new lows below the neutral line.

Based on this outlook, we may expect the downside momentum to continue this week, targeting the 126.16 support level. However, a bullish daily candle above the 20 DMA level could eliminate the bearish possibility and open a long opportunity toward the 140.00 area.

XAU/USD 

As per last week’s price prediction, XAU/USD continued pushing higher after making a bullish break of structure and provided more than 1100 pips to bulls. As the current price is backed by a lot of support from the bank’s collapse and weaker US Dollar. In that case, the XAU/  USD price has a higher possibility of increasing above the 2,000.00 level in the coming days.

This technical analysis shows the daily price of XAU/USD, where the current price is aiming higher with a strong high formation above the 1958.00 level. The bullish structure break confirmed the bullish trend continuation possibility where a minor recovery is pending.

The dynamic 20 EMA is below the price, aiming higher, while the dynamic 100-day SMA is below the 20 DMA. The MACD Histogram showed an overbought price where the current histogram is extremely bullish above the neutral line.

Based on the current outlook, the broader outlook is bullish before the XAU/USD price, which can move even higher in the coming days. However, a minor bearish recovery is pending in this pair. In that case, investors should monitor how the price reacts from the 2000.00 to 2011.00 area to find the most reliable reversal opportunity.

BTC/USD

Bitcoin dipped below its ascending parallel channel on March 2 and consolidated for four days. By March 9, a sell-off caused 10% losses. 

As a result, stablecoin holders panicked after American banks collapsed, swapping their unstable coins for safer ones. Some market participants bought USDC at a bargain, looking for a peg. The Industry Recovery Fund would be transformed into Bitcoin, Ether, and Binance coins, as said by Binance CEO.

After crossing the 23,000.00 mark and gathering buy-stop liquidity above 24,000.00, the price would rally to 28,000.00 and the psychological threshold at 30,000.00.

The CPI was cooled as per last week’s result, while the collapse in banking sectors created pressure on the US Dollar. Therefore, the coming trading days would be a great chance for crypto investors.

A sell-side liquidity grab and a bullish breakout clearly show a strong bullish trend for the BTC/USD daily price.

The price trades above the critical high volume level with a stable momentum, while the current dynamic 20 EMA is below the price. 

Based on this outlook, the buying possibility is potent for this pair, where a minor bearish recovery is pending. In that case, any bullish opportunity from the 23,906.00 to 24,200.00 area could increase the price towards the 30,000.00 area.

It is going to be a volatile week, as the Fed will decide whether they will raise the interest rate or not. However, before the FOMC a minor correction from last week’s price action could provide some short term trading opportunities.

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